CHAOS IN HOLLYWOOD

THE WORLD OF BUSINESS about chaos theory and the success of Hollywood films... Art De Vany, an academic specializing in industrial economics, began to wonder if the instability of the film industry could be explained by chaos theory, the nascent science that tries to explain such inexplicable natural phenomena as the evolution of weather, the flow of a river, or the course of a measles epidemic. In a recent "Economic Journal" article, De Vany and a coauthor, David Walls, developed a mathematical model of how filmgoers behave which finally provides a rigorous intellectual basis for the old Hollywood adage "Nobody knows anything." The reason the movie business seems so chaotic, De Vany and Walls declared, is that, scientifically speaking, it is chaotic--or borderline chaotic, at least. "The film industry is a complex adaptive system poised between order and chaos," De Vany said... At Irvine, he teaches a graduate course that combines chaos theory with artificial intelligence, evolution and game theory. (He is even writing a book applying chaos and evolutionary theory to modern-day physical fitness.) ... After examining the box-office records of three hundred movies released between May, 1985 and January, 1986, De Vany and another economist David Walls, became convinced that film viewers were behaving in a Bose-Einstein process similar to the movement of gas molecules... If De Vany is correct, film industry executives may be wasting their time when they try to predict how movie-goers will react... Writer spoke with Bill Mechanic, the chairman of Twentieth Century Fox, and Peter Chernin, president of Fox's parent News Corporation... The two men have turned Fox from a loss-making Hollywood also-ran into a thriving film factory that has enjoyed a string of hits... Chernin and Mechanic have gotten out of the "middle-class" picture--those costing between twenty-five and forty million dollars to make... Instead they are concentrating on "cheap" pictures (under twenty-five million) and expensive pictures of sixty million and up... Between 1980 and 1996, the average cost of producing and marketing a Hollywood film rose from thirteen million seven hundred thousand dollars to fifty-nine million seven hundred thousand dollars, and increase of four hundred and thirty-five per cent. At sixty million dollars a movie, studios can quickly run up hundreds of millions of dollars in losses if they don't have any hits... Mentions James Cameron's "Titanic", with a production cost which may reach two-hundred-million dollars... Where the next blockbuster will come from is hard to predict--a fact illustrated by the recent experience of Mark Canton, former head of Sony Pictures... In his five-year reign he was responsible for many expensive movies which failed at the box-office, but since leaving, films he developed have become hits... When I spoke to Canton recently, he seemed somewhat shaken by his experience. "Hollywood is place of great irony at all times," he said. ... According to Mechanic, there are six actors who can be relied on to boost box office revenues: Tom Cruise, Harrison Ford, Mel Gibson, Tom Hanks, Arnold Schwarzenegger and John Travolta.

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